Positioning Watch – Is this a bear market rally or the beginning of a bull run?
We look into how traders are positioned every Saturday to assess whether we are leaning with or against the wind. Is this a new bull run or just another bear market rally? Let’s have a look at the num
Each Saturday we release our Positioning Watch series to clients of Steno Research.
We are on the watch for signs that this is another bear market rally in this week’s edition. Can we see signs of exaggerated risk taking already now? Let’s have a look at it.
Equities: Markets are still short, meaning that the short-squeeze can continue
- The short squeeze in equities seen through January can continue as positioning remains very short
- Nasdaq positioning is less short than a week ago, but we remain far from the positive lean in Nasdaq seen when we discussed a soft landing in Q3-2022
- No material change to positioning in S&P 500 and Russell 2000 over the past week
Bottom-line: We continue to like long equity risk as markets remain stuck with wrongfooted positioning
Table 1: Equity positioning across indices (% of open interest)
Chart 1: Nasdaq 100 vs Positioning (% of open interest)
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